Bitcoin has shown it’s here to stay, rebounding sharply by 9% from recent lows. The sudden surge has ignited hopes among traders that the cryptocurrency may have finally bottomed out after a prolonged period of bearish sentiment.
After sinking to its lowest levels since February, Bitcoin climbed back up to reach $63,000 during the week of July 14, signifying to some that the digital asset may have hit bottom and is ready for its next bull cycle. The coin has been grappling with bearish sentiment for months, experiencing a prolonged downturn that has tested the resolve of even the most seasoned investors. This extended slump has been attributed to a confluence of factors, including macroeconomic uncertainties, regulatory concerns, and the ongoing fallout from high-profile crypto market collapses.
On July 6, financial analyst Wolf posted on X that they were seeing “a notable bullish divergence on the daily RSI, and the broadening wedge pattern adds further interest.” Another analyst, Scott Melker, posted that he saw Bitcoin’s closing price as indicative of its future long-term floor.
The significant price decline that Bitcoin saw is one factor helping boost it back up as traders look to capitalize on short-term fluctuations are taking action. While cautious optimism remains prevalent, there’s been a shift in market sentiment, with some investors perceiving the recent lows as a buying opportunity. The election is also spurring interest in Bitcoin and in cryptocurrency in general as the next U.S. president could be integral in setting the stage for the future of digital currency.
Bitcoin’s future floor is important to note in the overall growth of Bitcoin, particularly when it is experiencing the bust part of its boom and bust cycle. Bitcoin has experienced multiple such cycles over time as part of its development. Generally speaking, the bust part of the cycle is still higher than previous booms, meaning that while the asset can take significant dips in value, those dips don’t offset the gains from previous bull runs.
In 2022, for instance, Bitcoin went way down to around $16,500. In 2017, investors were celebrating when the coin passed $4,000 for the first time. That’s still a 400% gain in four years’ time, demonstrating how high and fast Bitcoin’s floor has been building.
Overall, Bitcoin has shown remarkable price appreciation since its inception, despite experiencing significant volatility. This historical performance, while not indicative of future results, is a major factor keeping some investors buying – especially when the coin’s value is down.
